The future of San Jose's mounted horse patrols grew more grim Thursday, when supporters called off fundraising efforts and demanded the city return more than $50,000 it has already donated to save the unit from the budget ax.

A top City Council aide who heads the nonprofit Friends of the San Jose Mounted Unit said the group is concerned that the city manager will cut the horse patrol as part of a major downsizing regardless of private donations unless the police officers' union accepts 10-percent pay cuts to help balance the budget.

"Now that we're actually raising the money, they're changing the rules," said Denelle Fedor, the nonprofit's president and chief of staff for Councilman Pierluigi Oliverio, accusing City Manager Debra Figone of acting in "bad faith."

Figone fired off a response memorandum calling obituaries for the mounted unit "premature" since the mayor and council have yet to finalize budget decisions. She offered to meet with Fedor's group to "clarify any misunderstanding."

But that didn't mollify Fedor, who argued the city is sabotaging fundraising efforts and violating a partnership agreement signed Dec. 15 by suggesting the mounted unit may be axed anyway in the final budget. A lawyer for the group sent a letter demanding that the city return $53,000 in donations and reimburse it for $10,075 in fundraising expenses.

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The dispute comes a quarter-century after the mounted unit was founded with $70,000 in private donations from San Jose business groups who were concerned that people were afraid to come downtown. Over the years the unit has proved effective in both public relations and crime-fighting, where mounted officers can easily see over and steer crowds, and nimbly navigate parks and alleyways inaccessible to patrol cars.

But it also has been a perennial target for budget cuts in a city facing a $115 million deficit, its 10th straight shortfall. Even if officers agree to the permanent pay cuts the city wants -- they offered to accept them only for a year -- more than 100 cops would have to be laid off by July. Cuts could double otherwise.

Figone said in her memo that if that were the case, the mounted unit would face "additional review," but added that services "associated with fundraising are more likely than not to be maintained." The city, she said, does not intend to violate its December agreement for joint public and private funding of the horse unit.

Friends of the San Jose Mounted Unit has raised or received commitments for $97,000 in addition to the $53,000 already given to the city. Under the agreement, it needs to raise a total of $280,000 to maintain the unit for a full year. And even that would be a diminished presence of just two officers, down from eight four years ago and 10 at its inception.

Curtis Landi, president of San Jose technology company Supracor, pledged $17,000 toward keeping the mounted unit and said he hopes something can be worked out with the city.

"This is an opportunity for intelligent people to stop and take a closer look at the advantages of the mounted unit," Landi said.